Chariotís oil miss hits HRT
Latin Americaís worst-performing initial public offering in two years, is losing its appeal to potential partners for oil exploration in Namibia after a competitorís well in the African nation failed to yield crude, Bloomberg reported yesterday.
The value of HRTís Namibian exploration licenses, the only offshore areas held by the Rio de Janeiro-based oil startup, is falling after Chariot Oil & Gas Ltd. (CHAR) drilled a second dry hole, said Banco Itau BBA SA analysts Paula Kovarsky and Diego Mendes. Before the Namibia disappointment, the company expected to fetch US$460 million by selling a third of its exploration licenses, according to the Itau analysts. By Monday, HRT hadnít provided an official target price for the Namibia assets.
ďThereís no positive way to look at the results in Namibia for HRT,Ē TJ Conway, a research and advisory manager at New York-based Energy Intelligence Group, said in a telephone interview from Washington DC.
HRT chief executive officer Marcio Mello said in a conference call on Monday that Chariotís failure to find commercial quantities of hydrocarbons in its Kabeljou well at the Nimrod prospect doesnít affect HRTís outlook and drilling plans for Africa.
HRT wonít sell a stake in Namibia if the price isnít right, Wagner Peres, the head of HRTís Namibia operations, said. HRT has enough cash on hand to cover operations until July 2014, Mello added.
He said Chariotís dry well was over 100 kilometres away from HRTís closest drilling prospect and the negative results donít reduce the chances of success at HRTís areas. HRT plans to drill its first well in early 2013, the company said yesterday in an e-mailed response to questions.
ďMost of the companies we are negotiating with are not concerned about this result,Ē Mello said. ďOur prospects are far away, completely independent.Ē
However, Chariotís Kabeljou well was one of HRTís ďlast hopesĒ this year for positive data, Emerson Leite, an analyst at Credit Suisse said in a research report on Monday. Credit Suisse cut HRT to the equivalent of hold from buy after Chariot announced the dry hole.
ďWe would now prefer to wait for the company to prove its geological thesis in either Solimoes and Namibia before getting exposure to the shares,Ē Leite said. Ė Bloomberg